By Christos Makridis
Investing has long been criticized as an activity reserved for the elite and the powerful, especially in the flow of venture capital for startups. The nascent Web3 community has not escaped these criticisms. But one company is determined to change things.
Launch House “launched” a $10 million fund called House Capital using a 506(c) vehicle that allows additional accredited, but smaller, sponsors to participate in their ecosystem of founders and startups.
Launch House is an exclusive member community focused on connecting and supporting top entrepreneurs. Unlike the vast majority of acceleration programs that exist for entrepreneurs and founders, they are committed to creating a space where people can not only work together, but also live and learn together, through the ups and downs. . Physical communities already exist in Los Angeles and New York, and Launch House is considering other locations.
Traditional venture capital is lucrative, but difficult to penetrate. “Partners of most top-tier venture capital funds have typically achieved success with their own start-ups before joining, a journey that can take years or even decades. When hiring entry-level employees, these funds can sometimes hire a few young graduates from top universities in the world. Yet most startup founders can easily distinguish between VCs who have “paid their dues” in their own startups and those who haven’t gained the crucial experience of building their own company,” said Kevin Virgil, Chief Investment Officer at Meta Impact Capital.
This is where House Capital contrasts with the traditional approach: they lower the barrier to entry to participate in venture capital, and they will redirect capital to Launch House.
“We want to enable a wider range of people to experience the benefits of a venture capital fund,” said Brett Goldstein, co-founder of Launch House. Rather than simply pay out all returns to shareholders, House Capital will largely reinvest the returns back into Launch house, “creating stronger programming and better experiences for members,” they announced on July 27. This makes investments in House Capital investments the underlying people who make up the Launch House community.
“Founders of startups that House Capital invests in will get lifetime membership in the Launch House community and full access to community amenities, including fundraising support, cohort-based digital cohorts, and residencies and retreats. exclusive in-person worldwide,” they continued. Launch House members access more than traditional mentoring and networking than is present in a conventional accelerator program; they access co-living residencies, conferences around the world, executive coaching and a space to openly share challenges and uncertainties.
The genesis of Launch House is very personal. After going the conventional route, Brett Goldstein was unhappy. “On the outside my life looked great, but inside I was lost and confused,” Goldstein said. “What I realized was that everyone is looking for a community, so I wanted to build a place where people can grow not only professionally, but also personally, with each other…to create a feeling belonging for everyone,” he said.
House Capital’s Limited Partners (LP) include an interesting and accomplished group of people, including: the co-founders of Dropbox, YouTube and Riot Games, as well as Michael Ovitz and the C-level operators of Polygon Studios. Members sign up not only for a predictable rate of return, but for a community that mentors and gains experience with each other. “The value that venture capitalists provide on top of capital isn’t always there…I want to be able to add and share my experience,” said Ryan Wyatt, CEO of Polygon Studios. “What we’re seeing are young founders having access to capital…everything looks different from top to bottom and it’s a good time for that…really talented people are going to come out on top,” Wyatt said.
“The rapid growth of today’s Web3 ecosystem is the most exciting innovation we’ve seen in years – perhaps since the inception of the Internet itself…Web3 is not just a new technology, but a structural shift in how online communities are created and connected,” Virgil said.
The Web3 investment brings many new ideas and opportunities for building community, especially with the expansion of the metaverse. If augmented and virtual reality products continue to advance, we may soon be able to spend time together even though we are geographically far apart.